The Worst That Could Happen

Natural Disaster! Lawsuit!

Your Company Is Decimated by a Natural Disaster

Whether your office building is buried under a landslide or hit by a hurricane, there are three immediate steps you should take, says Dave Bowe at Crisis Management Worldwide in Wilmington, North Carolina.

1. First, check on your employees and customers.

2. Any injuries? Call 911. Then call your employees' families and, if you can, your customers'. Take a deep breath.

3. Now start assessing your building.

Prevention is the Best Medicine:
You can't stop a tornado, but you can create a contingency plan and ensure you have insurance.

Your Company Is the Target of a Large Lawsuit

>Maybe you've heard of the lawsuit that Kellogg's is fighting. Seems a Pennsylvania woman left a Pop-Tart in her toaster last summer before driving her kids to school. When she returned 10 to 20 minutes later, smoke was pouring from her house, and firefighters were on the scene. The woman is now seeking $100,000 from Kellogg's for damages to her house, and is also suing Black & Decker, the makers of the toaster.

If you're hit by an out-of-left-field lawsuit, consider some free advice from Patricia Eyres, attorney and president of Litigation Management & Training Services Inc. and author of The Legal Handbook for Trainers, Speakers & Consultants :

1. "Take the legal process seriously," says Eyres. "Even if you believe the claims to be without merit, failure to respond to a lawsuit may result in a default judgment." At that point, Eyres explains, the judge acts as though every allegation against you has been proved.

2. "Speak with one voice from your organization," warns Eyres. "There is nothing the media-and the plaintiffs' attorneys-love more than inconsistent messages from different people within an organization."

3. When it comes to employee lawsuits, "be very careful to comply with all laws governing discrimination and harassment," says Eyres. "'Don't discriminate, do investigate and don't retaliate' is the best advice for any entrepreneur."

Think you'll never be on the receiving end of a lawsuit? Don't be so sure. "Regrettably, lawsuits are a byproduct of doing business," says Eyres. "Control it like a business, and select the best business outcome to meet your needs. This means reacting rationally rather than emotionally-not easy for entrepreneurs who have built their own businesses from the ground up. Don't make litigation personal."

Prevention is the Best Medicine:

  • "Establish personnel policies and enforce them consistently," says Eyres.
  • "When creating business records of any type, including formal letters, contracts, memos or informal e-mail," explains Eyres, "keep in mind, those documents may one day provide the basis for reconstructing the events that may be the subject of a dispute."

Geoff Williams has written for numerous publications, including Entrepreneur, Consumer Reports, LIFE and Entertainment Weekly. He also is the author of Living Well with Bad Credit.

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This article was originally published in the July 2002 print edition of Entrepreneur with the headline: The Worst That Could Happen.

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